Welfare Reform on the Web (February 2004): Pensions - UK

ARE TRUSTEES REQUIRED TO GIVE REASONS? THE ARGUMENT AGAINST

R. Evans

Pensions, Vol. 9, 2003, p.124-130

The article examines the case law allowing trustees to keep their reasons for
decisions confidential. It explains the duties of trustees and the court's interpretation
of these. The author argues that disclosure of reasons can lead to bad feeling
and that the right of confidentiality protects against speculative complaints
and litigation. On a practical level, in a diverse group of trustees each may
have their own reasons for their decision and putting together a single set of
reasons may be futile. The article concludes by citing Wilson V Law Debenture,
a 1995 case that stated that unless there is evidence to the contrary, a trustee
is presumed to have exercised his discretion properly.

ASPECTS OF THE ECONOMICS OF AN AGEING POPULATION

Select Committee on Economic Affairs

London: TSO, 2003 (House of Lords papers, session 2002/03; HL179)

By 2051, it is predicted that 25% 0f the UK population will be aged over 65.
Report examines ways in which this demographic challenge can be met. It emphasises
the importance of increasing the labour force participation of older workers,
and recommends that the present contributory state pension system should be replaced
by one based on citizenship entitlement. Goes on to assess the opportunities available
for making private provision for retirement. Concludes that, in spite of inadequate
voluntary private pension saving, further compulsion, in addition to that which
is already in place under the national insurance system, is not inevitable. Finally
deals with the excessive complexity of the public pension system, noting particularly
the effects of means testing, which include high marginal tax rates and reduced
incentives to save. Assesses whether the UK faces a pensions crisis and recommends
the establishment of an independent authority to provide more stability and certainty
in the design and implementation of appropriate pensions policies.

In this first of two papers, the author explores how the age of retirement
could become a social choice rather than an outcome of economic circumstances.
The history of pension policies and retirement practices is outlined, and the
notion of a retirement age, and how it is related to old age, examined. Finally
the paper considers whether there is any evidence to suggest that employees wish
to choose the time of their retirement.

SHOULD TRUSTEES GIVE REASONS FOR DECISIONS? THE ARGUMENT FOR

T. Cox

Pensions, Vol. 9, 2003, p.118-123

The article argues that trustees should give reasons for their decisions to
members affected by them. The author cites a recent case, Mr. C. Allen V TKM
Group Pension Trust Limited, in which the plaintiff complained that the trustees
would not explain their refusal to allow him an early retirement pension. The
pension ombudsman states that although there is no legal duty of disclosure and
therefore no breech in the law this doesn't mean there was no maladministration.
Different types of trustee decision are also summarised. The article concludes
that if trustees have confidence in their reasons there is no reason not to disclose
them.